High-speed, high-capacity data communication networks are desirable in a wide variety of industries. Generally, such networks operate to transmit large amounts of electronic data from one location to another location at a relatively high rate of speed. For some applications, the bandwidth or capacity (e.g., data transfer rate) of the data communication network may be more desirable than the speed of the network. In other applications, however, the latency or speed of the data communication network (e.g., the time it takes data to be transmitted between a source and a destination within the network) may be more important than the capacity. Networks with a low latency may improve both the efficiency and profitability of a given application for which the network is being used.
The latency of a data communication network can be affected by the capacity and physical characteristics of the network. Although saturated usage of a network with a relatively low capacity may cause congestion, which can lead to increased latency, in many situations, latency is more closely aligned with the inherent limitations of the electrical characteristics of the physical circuit defining the network. Data or energy pulses travel at different speeds in different mediums. Accordingly, a data communication network that transmits data using one type of medium (e.g., air) may have a lower latency, or higher speed, than a data communication network that uses another type of medium (e.g., metal). Recently, to decrease latency, some data communication networks have employed high-speed mediums to increase data transfer speeds and reduce latency. For example, many conventional data communication networks use fiber-optic cables, free-space radio waves (e.g., microwaves), and free-space optical technologies (e.g., laser links) to transmit data.
High-frequency trading (HFT) is one industry that relies on high-speed data communication networks. HFT is the automated, algorithmic, and rapid buying and selling of securities, such as stocks. According to some strategies, HFT includes monitoring disparate (e.g., geographically separated) financial markets for securities that can be bought low in one market and sold high in another market. Because changes in price of a security in one market are usually quickly reflected in other market, the buying and selling of securities must be performed rapidly for HFT to be successful. Accordingly, HFT providers rely heavily on the processing speed of the trades, which is dependent on the latency and speed of the data communication network being employed. For this reason, many HFT providers use data communication networks that utilize low-latency mediums, such as air, to execute the HFT process.